MUTHUVEERAN CHETTY Vs. GOVINDAN CHETTY

JUDGEMENT

(1.) The question raised in this reference to the Full Bench is whether a member of a Joint family to whom a promissory note is allotted at an oral partition among the members of that family can maintain an action on the promissory note as distinct from the debt, in the absence of an endorsement of transfer made on the promissory note or of a deed of assignment executed in respect of that note.

(2.) This question arose in the revision filed by the plaintiff who was non-suited by the learned District Munsif of Pudukottai who upheld the contention of the defendant in the suit that the plaintiff obtained no rights in the promissory note without an assignment in his favour. The facts are that the defendant executed a promissory note for a sum of Rs. 70/-in favour of the plaintiffs grandfather in 1937. The Payee-grandfather died, and at a partition which took place between the sons of the payee, that is, the plaintiffs father, and his brother the promissory note Was allotted to the plaintiff's father. No endorsement was however made on the note. Subsequently, the defendant had been making various payments and appropriate endorsements of payment had been made on the Promissory note, On the death of the plaintiff's father, the right to this item of property survived to the plaintiff and his brother. The latter was given away in adoption so that the plaintiff became exclusively entitled to all the rights under the promissory note. Originally the plaintiff's brother had been joined in the action as second plaintiff, but in view of his adoption, he was struck off the record. Apart from other contentions, where under the defendant sought to invoke the application of Madras Act IV of 1938, the further contention was advanced by the defendant, that in the absence of an assignment of the promissory note, the plaintiff was not entitled to any rights thereunder. It Was this issue that was found in favour of the defendant, against which the revision was filed in this Court.

(3.) Balakrishna Aiyar, J., noticed the existence of divergent views on this question. He referred to one line of decisions wherein it has been held thai there could be no valid transfer of a promissory note payable to order otherwise than by endorsement and delivery, and that an assignee of a negotiable promissory note cannot sue on the Promissory note as such unless it is endorsed to him, and further that if the suit was on the chose in action on foot of an assignment otherwise than by endorsement, such a transfer of the right could not be effected except by writing as required by Section 130 of the Transfer of Property Act. In the other line of cases, the view found favour that there could be a valid transfer of a promissory note otherwise than by an endorsement, and that such a transfer did not stand excluded by any of the provisions of the Negotiable Instruments Act. Certain decisions have taken the view that such an assignment otherwise than by an endorsement could be spelt out of a reference to the allotment in a partition list. In view of this conflict of opinion, Balakrishna Aiyar, J., found it necessary to have the matter referred to the Full Bench.